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Financial Accounting for MBAs
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Financial Accounting for MBAs

Ninth Edition
January 2025 | 704 pages | Cambridge Business Publishers
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Financial Accounting for MBAs, Ninth Edition was developed to meet the needs of today’s business managers by delivering a contemporary, relevant, and highly engaging approach to financial accounting. Informed by extensive market research and feedback from faculty and students, this edition emphasizes usability, real-world relevance, and managerial decision-making.

Designed specifically for MBA programs, the text helps students learn how to read, analyze, and interpret financial accounting information to support business decisions. Real company data is integrated throughout the modules and assignments, ensuring that accounting concepts remain practical, relevant, and immediately applicable. The book’s flexible, modular structure accommodates a wide range of MBA formats—from accelerated mini-courses to full-semester offerings—and supports face-to-face, online, hybrid, and flipped classroom delivery.

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About the Authors
 
Preface
 
Brief Contents
 
Contents
 
Module 1: Financial Accounting for MBAs
Reporting on Business Activities

 
Financial Statements: Demand and Supply

 
Structure of Financial Statements

 
Analysis of Financial Statements

 
Financial Statements and Business Analysis

 
Book Road Map

 
Global Accounting

 
Appendix 1A: Financial Statement Data and Analytics

 
Appendix 1B: Accounting Principles and Governance

 
Guidance Answers

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 2: Introducing Financial Statements
Balance Sheet

 
Income Statement

 
Statement of Stockholders’ Equity

 
Statement of Cash Flows

 
Articulation of Financial Statements

 
Additional Information Sources

 
Global Accounting

 
Guidance Answers

 
Multiple Choice

 
Questions

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 3: Transactions, Adjustments, and Financial Statements
Basics of Accounting

 
Accounting Cycle Step 1-Analyze Transactions and Prepare Entries

 
Accounting Cycle Step 2-Prepare Accounting Adjustments

 
Accounting Cycle Step 3-Prepare Financial Statements

 
Accounting Cycle Step 4-Close the Books

 
Global Accounting

 
Guidance Answers

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 4: Analyzing and Interpreting Financial Statements
Return on Equity (ROE)

 
ROE Disaggregation: DuPont Analysis

 
Return on Assets and Its Disaggregation

 
Balance Sheet Analysis with an Operating Focus

 
Income Statement Analysis with an Operating Focus

 
Return on Net Operating Assets (RNOA)

 
RNOA Disaggregation into Margin and Turnover

 
Analyzing Global Reports

 
Appendix 4A: Operating versus Nonoperating Classification

 
Appendix 4B: Nonoperating Return Component of ROE

 
Appendix 4C: Vertical and Horizontal Analysis

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 5: Revenues, Receivables, and Operating Expenses
Revenue

 
Sales Allowances

 
Unearned (Deferred) Revenue

 
Foreign Currency Effects

 
Accounts Receivable

 
Expenses and Losses

 
Pro Forma and Non-Gaap Disclosures

 
Global Reporting

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 6: Inventories, Accounts Payable, and Long-Term Assets
Inventory-Costing Methods

 
Inventory-Reporting

 
Inventory—Analysis Tools

 
PP&E Assets-Capitalization and Depreciation

 
PP&E Assets-Sales, Impairments, and Restructuring

 
PP&E Assets-Analysis Tools

 
Intangible Assets

 
Global Reporting

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 7: Current and Long-Term Liabilities
Accrued Liabilities

 
Accruals for Contingent Liabilities-Warranties Example

 
Short-Term Debt

 
Long-Term Debt-Pricing

 
Long-Term Debt-Reporting

 
Quality of Debt

 
Global Reporting

 
Appendix 7A: Apply Time Value of Money Concepts

 
Appendix 7B: Amortization of Debt

 
Appendix 7C: Verizon Financial Statements and Debt and Lease Notes

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 8: Stock Transactions, Dividends, and EPS
Stockholders’ Equity and Classes of Stock

 
Stock Transactions

 
Stock-Based Compensation

 
Dividends and Stock Splits

 
Accumulated Other Comprehensive Income (AOCI)

 
Earnings per Share (EPS)

 
Global Reporting

 
Appendix 8A: Stock-Based Compensation: Reporting and Analyzing

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 9: Intercorporate Investments
Intercorporate Investments

 
Equity Investments with Significant Influence

 
Equity Investments with Control

 
Global Reporting

 
Appendix 9A: Accounting for Derivatives

 
Appendix 9B: Equity Carve-Outs

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
 
Module 10: Leases, Pensions, and Income Taxes
Leases

 
Pensions

 
Income Taxes

 
Global Reporting

 
Appendix 10A: Lease Accounting Example-Finance and Operating Leases

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 11: Cash Flows
Framework for Statement of Cash Flows

 
Cash Flows from Operating Activities

 
Cash Flows from Investing Activities

 
Cash Flows from Financing Activities

 
Interpreting and Analyzing CASH FLOWS

 
Appendix 11A: Direct Method Reporting for Statement of Cash Flows

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 12: Financial Statement Forecasting
Forecasting Process

 
Forecasting the Income Statement

 
Forecasting the Balance Sheet

 
Building Forecasts from Segment Disclosures

 
Appendix 12A: Forecasting the Statement of Cash Flows

 
Appendix 12B: Multiyear Forecasting with Target Cash and Debt Financing

 
Appendix 12C: Parsimonious Method for Forecasting NOPAT and NOA

 
Appendix 12D: Morgan Stanley’s Forecast Report on Procter & Gamble

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Module 13: Using Financial Statements for Valuation
Equity Valuation Models

 
Discounted Cash Flow (DCF) Model

 
Residual Operating Income (ROPI) Model

 
Additional Modeling Considerations

 
Managerial Insights from the ROPI Model

 
Global Reporting

 
Appendix 13A: P&G Financial Statements

 
Appendix 13B: Derivation of Free Cash Flow Formula

 
Appendix 13C: Deutsche Bank Valuation of P&G

 
Guidance Answer

 
Multiple Choice

 
Questions

 
Mini Exercises

 
Exercises

 
Problems

 
Management Applications

 
Data Analytics

 
Ongoing Analysis Project

 
Solutions to Review Problems

 
 
Appendix A: Compound Interest Tables
 
Appendix B: Chart of Accounts with Acronyms
 
Appendix C: Ongoing Analysis Project
 
Appendix D: Data Analytics and Visualizations
Data Analytics

 
Blockchain Technology

 
Video Resources For Tableau

 
Mini Exercises

 
Exercises

 
Data Analytics

 

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Key features

NEW TO THIS EDITION:

  • Updated content reflecting the evolving needs of MBA students and today’s business environment.
  • Continued emphasis on real company financial data, including footnotes and management disclosures.
  • Enhanced modular flexibility to support diverse MBA program structures and instructional preferences.
  • Refined experiential learning projects that integrate analysis across modules.

KEY FEATURES:

  • Targeted MBA Audience: Designed for full-time, part-time, executive, and working-professional MBA programs with a focus on managerial decision-making and analysis.
  • Managerially Oriented Approach: Focuses on the most relevant aspects of financial accounting to help students make informed business decisions rather than perform mechanical bookkeeping tasks.
  • Flexible Modular Structure: Thirteen largely independent modules allow instructors to customize coverage while maintaining a cohesive learning experience.
  • Transaction Analysis Options: Supports multiple teaching styles by accommodating both financial statement effects analysis and traditional journal entry and T-account coverage.
  • Managerial Emphasis: Highlights ratio analysis, benchmarking, forecasting, valuation, and interpretation of both financial statements and nonfinancial disclosures.
  • Financial Statement Effects Template: A signature analytical tool that helps students understand the economic impact of transactions across the financial statements.
  • Focus Companies: Each module uses real companies to demonstrate concepts and engage students in analysis and interpretation relevant to MBA career paths.
  • Real Company Data Throughout: Contemporary company data, footnotes, and management disclosures are embedded across modules and assignments.
  • Dual Approach to ROE and Profitability Analysis: Uses both traditional and disaggregated ROE frameworks to deepen understanding of operating and nonoperating performance.
  • Industry-Level Data: Benchmarks and industry comparisons reinforce the importance of context in financial analysis.
    Decision-Making Orientation: Managerial Decision and Analysis Insight features encourage application of accounting knowledge to real business scenarios.
  • Research Insights: Select discussions connect academic research with modern business practice.
    Reviews for Each Learning Objective: Frequent reviews with step-by-step video solutions reinforce comprehension and build confidence.
  • Experiential Learning: Each module concludes with a hands-on analysis project that integrates learning using real company financial statements.
  • Excellent, Class-Tested Assignment Materials: A comprehensive set of multiple-choice questions, exercises, problems, and management applications emphasizes analysis, interpretation, and decision-making.